The World Bank Vice President for South Asia, Ms.
Mieko Nishimizu, has said that Pakistan economy was now in a much better
shape and it could absorb the external shocks such as the impact of
US-Iraq war, had Pakistan not implemented the reforms programme, it
would have gone financially bankrupt and could not would have been able
to absorb any external shock like Iraq crisis, she observed.

The World Bank chief for the region was talking to
the newsmen in Islamabad after completing her five-day visit to
Pakistan. The objective of her visit was to acquaint herself with the
current economic situation and specially to meet the new political
leadership of Pakistan. "I wanted to know the views of the
political government and what is on the mind of the new political
leaders", Ms. Nishimizu remarked. She was glad to note that the new
political set up was appreciative of and committed to the reforms
programme.

She, however, mentioned that Pakistan economy was not
completely out of wood and there was lot to be done yet. "Foreign
exchange reserves of $10 billion were not enough that we should go home
and sleep, efforts should continue to further consolidate the
gains", she remarked adding that the outlook of the country's
economy was good and on the growing track.

During her visit Mieko met the President, the Prime
Minister his Advisor on Finance and the provincial chief ministers.

She said that the World Bank has question mark
whether the new political government would keep up with the pace of
reforms introduced by the Musharraf administration during the last three
years. During her meetings with provincial chiefs and other government
officials "she understand that continuity of reforms was high on
the agenda". She said that she got the most comprehensive briefing
from the Punjab government. Mieko said that Pakistan had been pursuing a
world-class reforms programme and the same pace should continue.

Answering a question, she said that CBR structural
reforms were critical. She agreed that there would be resistance when an
old system is replaced with the new one. She also defended the
performance of the WAPDA's uniformed chairman saying he had reduce the
line losses despite a number of difficulties. She said that the power
sector reforms needed much more pace since this sector was eating up
country's huge resources. Mieko said the World Bank had not asked the
government for the downsizing and it was rather its own initiative to
which we agreed. "There is enormous inefficiency in running of
government and we only compliment government's effort to do away with
the inefficiencies," she remarked.

She said that privatisation programme also needed to
be pursued with commitment.

During his meeting with World Bank delegation headed
by Ms. Mieko, Prime Minister Mir Zafarullah Khan Jamali assured them of
continuity and consistency of economic policies and said that now fiscal
policies would not be changed on personal whims and caprices of
individuals. "Pakistan would remain fiscally responsible and would
not change its fiscal and economic policies". The WB delegation
asked Pakistan to vigorously implement reforms process in banking and
energy sectors and tax collection machinery. The Bank also asked to make
viable Fiscal Improvement Plan for public sector enterprises, specially
for WAPDA.

The PM also shared his future vision of Pakistan with
the WB delegation. He also discussed the role of education and health
sectors in improving the quality of life of the common man. "We
believe consistent economic policies to effect an economic turnaround
and sound economic policies along with prudential fiscal measures would
establish firmly Pak position in the comity of nations," he added.

The WB Vice President lauded the country's smooth
transition to democratic role and said that this fact has been much
appreciated by the donors. Earlier, the WB's Vice President attended a
detailed briefing, presented by different ministers and heads of
departments covering all sectors of the national economy.

Advisor to Prime Minister on Finance, Shaukat Aziz
welcomed the support extended by World Bank which has averaged around US
dollars 600 million per year as well as extensive technical assistance
and capacity building provided by the World Bank. The government is also
working to improve investment climate by removing irritants and reducing
cost of doing business. In this regard, interest rates and tariff have
been substantially reduced and several other steps are underway.

The Advisor discussed various poverty reduction
initiatives, which include Prime Minister Falahi Programme, Khushhali
Bank and Zakat Programmes. He said higher economic growth will help
reduce poverty.

Minister for Education, Ms. Zubaida Jalal explained
education sector reforms, which are focusing on improving quality and
developing of education.

CBR Chairman said that the government would shortly
present World Bank a blue-print to even further improve tax
administration through application of IT, human resources, and
infrastructure.

The government so far has introduced Large Tax Payers
Units and Model Income Tax Office at Lahore. He further said that five
more Model Income Tax Offices would also be established at Rawalpindi,
Peshawar, Faisalabad, Quetta, and Karachi. Eventually this quality
service would be available throughout the country.